Kuaishou's 2023 revenue exceeded 100 billion yuan for the first time, with e-commerce driving a significant increase in advertising income

Kuaishou is a popular Chinese short video and live streaming platform that enables users to create, share, and discover content. It focuses on real-life, user-generated videos and offers features for social interaction and e-commerce.

Kuaishou Official ENG Site

Kuaishou's strategy to find more ways to monetize traffic and improve monetization efficiency has been effective.

On March 20, Kuaishou announced its Q4 and annual performance for 2023. Its total annual revenue reached 113.47 billion yuan, up 20.5% year-over-year; both adjusted net profit and profit for the period turned from loss to profit, greatly exceeding market expectations. Adjusted net profit was 10.27 billion yuan.

This is the first time the company's annual revenue exceeded 100 billion yuan and profit exceeded 10 billion yuan. Online marketing services (advertising), live streaming, and other services (including e-commerce) contributed 53.1%, 34.4%, and 12.5% to the annual revenue, respectively.

Advertising revenue, which reached a record high of 60.3 billion yuan last year, grew 23% year-over-year, mainly due to the rapid growth of Kuaishou's e-commerce business. The influx of new merchants and their demand for traffic exposure provided strong growth momentum for Kuaishou's advertising.

In Q4, its e-commerce business GMV (Gross Merchandise Volume) maintained a high year-over-year growth of 29.3%, reaching 403.9 billion yuan, with the average monthly number of buyers exceeding 130 million. During last year's Double 11 promotion, over 1 million merchants participated, with brand product transactions increasing 155% year-over-year, nearly 2,500 brands grew by 100%.

The full opening of Kuaishou Mall's tag page on the homepage has provided more growth space for platform advertising revenue. Kuaishou Mall is positioned as a shelf e-commerce, with a page layout similar to Taobao and Pinduoduo.

As more merchants join Kuaishou, the original model of merchants and broadcasters first building relationships with users through live streaming before selling goods is no longer applicable to new merchants. They need a faster and more efficient way to achieve sales conversion.

Moreover, the excessive use of private domain traffic by merchants to sell goods has limited value in enhancing Kuaishou's own traffic monetization revenue. After Kuaishou pushed for public domain traffic, merchants could gain sales through advertising, and the Kuaishou platform would obtain internal circulation advertising income from merchants.

Kuaishou e-commerce also launched many new features to help merchants improve promotion effects and earn more advertising revenue. For example, the "Whole Site Promotion" product includes new features such as investment diagnosis, post-investment review, and real-time material analysis, helping merchants achieve higher GMV conversions on Kuaishou. In the external loop performance advertising field, customer placements in industries such as media information, education and training, and games continue to grow.

Financial data show that Kuaishou's strategy to seek more traffic monetization methods and improve monetization efficiency has achieved good results. In 2023, Kuaishou e-commerce GMV exceeded 1.18 trillion yuan.

Besides advertising and e-commerce, Kuaishou live streaming also maintained modest growth. In Q4, this business revenue increased by 3.4% to 10 billion yuan compared to the previous quarter. It also strengthened local operations in multiple regions nationwide, with the number of guilds and broadcasters continuously increasing. By the end of Q4, the number of regional guilds collaborating with the platform exceeded 1,300.

Kuaishou user data is also growing. As of Q4, its average daily active users and monthly active users reached 383 million and billion, up 4.5% and 9.4% year-over-year, respectively.

Overseas, the company's monetization capability is further strengthening, with annual revenue reaching 2.28 billion yuan, nearly tripling year-over-year. At the same time, overseas annual operating loss narrowed to 2.8 billion yuan, compared to 6.6 billion yuan in the same period in 2022. This is mainly due to focusing on core market areas, with daily active users and user engagement time in key regions like Brazil and Indonesia steadily increasing year-over-year.

Kuaishou Technology's founder and CEO Cheng Yixiao said that last year Kuaishou promoted the upgrade of the traffic distribution mechanism, incorporating user experience indicators into the algorithm recommendation system, achieving simultaneous improvements in content quality and commercialization efficiency.

A person close to Kuaishou's investors told media that in the current competitive environment, the consensus among Kuaishou's investors and management is to no longer blindly expand, but to focus more on developing and operating commercial value. "Kuaishou has over 300 million users. By building commercial capabilities based on these users, there is considerable room for imagination," the person said.

In the short video and live streaming sector where Kuaishou operates, it still faces competition from Douyin, as both platforms offer similar services. Continuously innovating content formats to attract and retain users, and further optimizing diversified revenue streams, including advertising and e-commerce, will be key to maintaining profitability and steady revenue growth for the company.

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